Ripple Prime enters U.S. leveraged ETF financing market

Ripple is expanding its presence in traditional financial markets through Ripple Prime, which has begun providing financing for leveraged exchange-traded funds (ETFs). This move targets a U.S. sector containing approximately 593 leveraged ETFs with total assets exceeding $256 billion.

Ripple Prime, operating following the $1.25 billion acquisition of Hidden Road, provides total-return-swap financing to ETF issuers. This allows funds to amplify the daily movements of underlying stocks or indices without holding all the necessary securities directly. By offering these services, Ripple is entering a financing niche traditionally dominated by major Wall Street banks, capitalizing on tighter capital requirements and risk management constraints that have limited bank scalability.

This expansion is part of a broader strategy to transition Ripple from a blockchain payments company into a provider of institutional financial infrastructure. Recent activities also include a partnership with Brevan Howard to offer prime brokerage, clearing, and financing services across various asset classes. While the company is building fee-generating businesses, current reports do not specify the exact revenue generated from ETF financing or the extent to which XRP or the XRP Ledger are utilized in these transactions.